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US Could Classify Cryptocurrencies as ‘Money’ in Upcoming Regulatory Changes – Full Details

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Teuta Franjkovic
Published
By Teuta Franjkovic
US Federal building.

Credit: Bob Riha Jr / Getty Images.

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Key Takeaways

  • The US Treasury and Fed are considering revising the Bank Secrecy Act to possibly categorize crypto as “money.”
  • Regulatory bodies in the US are moving toward treating crypto like traditional money for regulatory reporting.
  • They expect to complete the rulemaking process for this new classification by September 2025.
Some of the leading US federal agencies are working together to update the definition of “money” in order to enhance reporting obligations for financial institutions involved in domestic and international cryptocurrency transactions.

The US Department of the Treasury’s semiannual regulatory agenda, published on Aug 16, highlights a forthcoming federal initiative aimed at equating the regulatory standards for cryptocurrencies with those for traditional fiat currency.

Fed and Treasury Broaden Crypto Definition

The Board of Governors of the Federal Reserve System and the Financial Crimes Enforcement Network are set to amend the definition of “money” as it appears in the Bank Secrecy Act.

The agenda indicates that the agencies plan to confirm that the regulations encompass transactions involving convertible virtual currencies, which are recognized either as having a currency-equivalent value or as substitutes for currency despite not having legal tender status. Additionally, the proposal intends to broaden reporting requirements to include digital assets that possess legal tender status, such as central bank digital currencies.

DOJ Targets AI Crimes

According to the Keynote 183 from the Act:

“Clarification of the Requirement to Collect, Retain, and Transmit Information on Transactions Involving Convertible Virtual Currencies and Digital Assets With Legal Tender Status”

The final notice of proposed rulemaking is slated for September 2025, pending approval. This development follows a recent action by the US government, which moved about 10,000 Bitcoin associated with an old Silk Road raid on Aug 14.

Arkham US Gov BTC transfer
Credit: Arkham intelligence

Alongside its focus on cryptocurrencies, the Department of Justice is also actively updating regulations and legal frameworks concerning artificial intelligence. On Aug 7, the DOJ requested that the United States Sentencing Commission revise its guidelines to include higher penalties for crimes facilitated by AI. These proposed changes aim to extend the current guidelines to encompass any criminal activity that is aided or abetted by basic algorithms.

Chevron Doctrine Overturned, SEC Crypto Authority Weakened

In June, the US Supreme Court struck down the Chevron doctrine, which has reduced the Securities and Exchange Commission’s power to regulate cryptocurrency policies.

Previously, under the Chevron doctrine, regulatory agencies like the SEC had substantial flexibility in interpreting and enforcing laws within nascent industries like cryptocurrency. However, a recent Supreme Court ruling now requires courts to evaluate if agencies are acting within their statutory limits.

This shift could benefit the cryptocurrency sector, which has been navigating regulatory uncertainties and vigorous enforcement by the SEC under Chairman Gary Gensler. The decision implies that agencies must now exercise greater restraint in extending their regulatory purview, particularly in emerging fields like cryptocurrency and artificial intelligence.

Furthermore, this change could influence ongoing legal disputes involving the SEC and prominent crypto enterprises such as Coinbase, Ripple, Binance, and Kraken. These firms have contended that the SEC has exceeded its mandate by categorizing certain digital assets as securities.

Senators Push Back

In May, the US Treasury and IRS rolled out new tax guidelines for cryptocurrency brokers. Starting in 2026, these regulations will mandate detailed transaction reporting and record-keeping of token costs.

More recently, Senators Wyden and Lummis voiced their concerns about the Department of Justice treating crypto software services as equivalent to unlicensed money-transmitting businesses. They argued that this could potentially violate First Amendment rights, underlining a growing tension in the regulatory landscape.

These regulatory efforts underscore a broader recognition of cryptocurrencies and digital assets as integral elements of the financial landscape. By standardizing reporting requirements for cryptocurrencies with those of traditional currencies, regulators aim to increase transparency and curb potential illegal activities in the cryptocurrency sector.

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    Teuta Franjkovic
    About the Author

    Teuta Franjkovic

    Teuta is a seasoned writer and editor with more than 15 years of experience. She has expertise in covering macroeconomics and technology as well as the cryptocurrency and blockchain industries. She has worked for several publications as a journalist and editor, including Forbes, Bloomberg, CoinTelegraph, Coin Rivet, CoinSpeaker, VRWorld and Arcane Bear. Teuta began her professional career in 2005, working as a lifestyle writer at Cosmopolitan in Croatia. From there, she branched out to several other publications, covering mainly business and the economy. She then turned her attention to the world of cryptocurrency and blockchain, believing that crypto is among the most important inventions in the history of humanity. Her involvement in fintech began in 2014 and she has since lent her expertise in writing, editing and gathering information about the world of crypto, blockchain, NFTs and Web3. An all-round news hound, mentor, editor, and writer, Teuta enjoys teamwork and good communication. She holds a WSET2 diploma and has a thing for chablis, punkrock music and shoes. She also holds a double MA in Political science and Entrepreneurship.
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